The Carlton Group will file a lawsuit against the Corporation of Hamilton and its leaders “imminently”, according to a person close to the action.

The action will be filed in the United States District Court for the Southern District of New York, where Carlton’s main New York office is located.

Carlton, the real estate private equity banker, acted as broker for the deal in which Mexico Infrastructure Finance LLC loaned developer Par-la-Ville Hotel & Residences Ltd $18 million as a bridging loan.

It is suing for commission and fees, which should have been paid when the money was released from escrow in a New York bank.

The loan was due to have been repaid to Mexico Infrastructure Finance LLC at the end of December last year.

The amount is believed to be $900,000, as well as all fees incurred during the process.

After the money was released from escrow, Par-la-Ville Hotel & Residences failed to repay the loan, and they also failed to pay Carlton’s commission, the plaintiffs in the action say they will allege.

The Carlton Group’s website says the real estate business was founded in 1991, and that it is an international real estate investment banking firm that specialises in raising large amounts of equity and debt on large, complicated transactions.

It adds that the firm also provides investment sale services for either large commercial real estate assets or loans positions held by banks.

The source told The Royal Gazette: “We are planning to file a lawsuit in the US District Court of the Southern District of New York, against the Corporation of Hamilton and the parties that authorised the release of those monies from escrow: the mayor, Graeme Outerbridge, and others involved in the transaction.”

It is understood that the $18 million borrowed from Mexico Infrastructure Finance was held in escrow in Bank of New York Mellon, said the source.

He added that an authorisation was signed that allowed Bank of New York Mellon to release funds into Michael MacLean’s personal bank account before November 2014.

“We think the idea was to invest the money for a month or two,” the source said.

He added that the money was not supposed to come out of escrow and into private hands.

“The plaintiffs weren’t expecting the money to be withdrawn from the account into someone’s own personal account,” the source said.

“MacLean didn’t withdraw the money himself; it had to be someone on behalf of the guarantor [the Corporation of Hamilton] who authorised the release from escrow.”

The Carlton Group has filed another lawsuit in the same US District Court, this one against Par-la-Ville Hotel & Residences, along with Mr MacLean, Johann Oosthuizen, Wakefield Quin Ltd and Theodore Adams III. Mr Oosthuizen is a lawyer with Wakefield Quin.

Mr MacLean’s defence to that lawsuit, which was filed on March 25, in which the Carlton Group is asking for “relief for fraud against defendant Michael MacLean”, states: “Further, the defendant avers [alleges as fact], that at all the material times, he was legally advised by Wakefield Quin Limited and through its counsel Johann Oosthuizen and throughout relied on their legal advice.”

The source said: “We filed the lawsuit in the Southern District of Manhattan in New York because the Carlton Group is located in New York, and also because the agreement was made in New York. It states in the [loan] agreement that any legal action would be commenced in New York.”

The Carlton Group’s website further describes the group.

“Carlton has offices throughout the United States and Europe and has consummated in excess of $100 billion of closed transactions,” it says. “Carlton’s expertise includes arranging passive promotable equity for large real estate transactions and typically raises 90-95 per cent of the equity to facilitate client transactions.

“Carlton also has a growing merchant banking division and owns and manages in excess of three million square feet of commercial, residential and retail space.

“Carlton frequently coinvests with clients either by participating in putting up deposit money or co-investing in the sponsor equity. Carlton also executes an aggressive international advisory platform which is currently executing well over $3 billion of equity, debt and investment sale advisory business throughout Europe.”